Tami Reller Talks Windows 8 Sales

Microsoft’s Tami Reller, who previously confirmed my story about the firm’s internal disappointments about the slow Windows 8 launch, spoke this week about, you guessed it, Windows 8. And in this her newly massaged message, Microsoft is back on board with its partners, rather than blaming them (publicly, at least) for the slow start.

I last wrote about Tami Reller, whose quickly becoming the public face of the Windows team at Microsoft, in Tami Reller Talks Windows 8.

Here’s what she had to say this week.

What Windows 8 means to Microsoft

Reller reiterated a consistent theme, that Windows 8 is Microsoft’s “biggest project since Windows 95.” But she also, for the first time, I think, described Windows 8 as I have, as “the biggest change to Windows” ever. “Windows 8 was a big, ambitious change for us, [and] it was something that we needed to and wanted to take the ecosystem on that journey with us.”

Windows 8 license sales

Microsoft has now sold 60 million licenses to Windows 8, which includes every possible type of sale (retail, upgrades, PC bundles, etc.), including sales to PC makers that have not yet been delivered to the public. Reller claims this sales figure means that Windows 8 sales are “roughly in line” with Windows 7 sales.

Windows 8 sales to businesses

When asked about Windows 8 sales to businesses, Reller reiterated Microsoft’s belief that Windows 8 and Windows 7 will be deployed alongside each other. Microsoft sees two key scenarios for Windows 8 in business. “Windows 8 apps would be interesting to a corporation and they would be building on the developer platform and, therefore, bring Windows 8 devices into either scenarios or lines of business, or work groups that were going to use a new app,” she said. “And [when] new Windows 8 devices are brought in, [they are] specifically tablets.”

Of course, businesses will simply continue deploying Windows 7.

A new view on the launch period

While it is a fact that Windows 8 sale have not met Microsoft’s internal goals and that Windows 8 sales in the real world in Q4 2012 were behind those of Windows 7 in the previous year and in the same time period after that product’s launch, Reller clearly needed to stop burning bridges with the firm’s PC maker partners. So a new, softer (public) view of the launch period is offered.

“We feel good about what we have been able to accomplish with the ecosystem,” she claimed. “[There is] still much more, so much more opportunity ahead, but certainly looking back we're pleased with what we were able to accomplish with the project, and what we were able to accomplish with the ecosystem heading into launch, and in this first selling season.”

She also addressed retail demand of Windows 8 during the launch period, which NPD data proves was lackluster at best.

“We all had a strong sense that unique touch devices, particularly touch laptops and tablets, convertibles would be in high demand,” she said. “The level of demand I think surprised a lot of people. And frankly, the supply was too short. I mean, there was more demand than there was supply in the types of devices that our customers had the most demand for.”

The claim here is that Windows 8 sales were lower than expected because PC makers delivered the wrong types of devices. I’ve written a lot about this, of course, but it’s certainly fair to note, as I already have in Explaining Windows 8 PC Sales Over the Holidays and This Best Buy Circular Says It All that there are far too many cheap, non-touch PCs in the market and too-few reasonable priced touch devices. That apparently is changing.

“There was some misalignment between where products were distributed and where there was demand, et cetera,” she continued. “So, there were some adjustments that were made real time. There were some adjustments that are still happening. And, frankly, there's a lot of the tablets that are just coming to market now. I mean, many of the x86 tablets are just coming to market now. Some of the Windows RT tablets did not get the type of distribution that perhaps would have been ideal. And so there's all of those dynamics, which are really important to take into consideration.”

She used this discussion to reveal that the number of Windows 8/RT devices in market jumped from 1000 unique systems at launch to 1700 today, so apparently those latter 700 are the ones customers actually want.

And that’s where things get weird, at least to me.

When you consider that Microsoft is internally agitated with PC makers for botching the launch, you also have to remember that these are companies that Microsoft needs to continue working with. So while Microsoft is also competing with them with Surface, it needs to make a public show of supporting the stuff that its partners produce, even though to date most of it has been junk.

“With Windows 8 we have the best PCs that have ever been built,” she says. “We have the best PCs in market that have ever been built.”

But.

“Collectively as an ecosystem and as an industry we want more and more touch assortment,” she continued. “Like if we say sort of what do we want more of and what does the market want more from us of? It's more touch assortment, and that's certainly tablets, that's certainly convertibles, touch laptops, touch laptops at great prices, all-in-ones, all-in-ones at great prices, I mean all of those are proving to be high demand items. And so that's still a partial to-do for the industry is just to continue to deliver on all of that. But, again, even in this month during this show, you've seen a lot of new devices in the touch category come to market, or at least announced to come soon.”

This is a tortured way of restating the original argument but trying to come off more positive: PC makers did not deliver the right kinds of devices at launch.

Surface update

Microsoft refuses to comment on Surface sales. But pressed on Surface, Reller did discuss Microsoft’s decision to let retailers sell Surface over a month ahead of the original schedule.

“We made a very explicit decision initially to launch [Surface with Windows RT] into our own stores, so that could have the opportunity to really watch, and watch carefully, and learn, and just get things right,” she said. “We always had it in our plan to then start conversations with retailers about bringing Surface into broader distribution. What we found when we started to have those conversations is they did want to do what retailers don't often do, and that is to get a product onto shelves very, very quickly. And in some cases it was a matter of days. And so we did have the opportunity then to see Surface in a few retailers for a few days of the holiday, which is great. That was helpful to us as we now prepare for the selling seasons to come. So, we were pleased, and I think it's safe to say they were pleased.”

Microsoft plans to deliver Surface in Pro in the waning days of January or early February. Reller noted that this device, unlike Surface RT, is more PC than tablet. “Surface with Windows 8 Pro is a PC that also does an incredible job as a tablet,” she said. “I mean, it's a[n Intel] Core i5, so the performance is terrific. And yet it has so many of the great attributes of Surface, including Touch Cover, Type Cover, Kickstand, all of the great hardware design that we've talked about with Surface. So, we're excited to be able to offer customers, both consumers and business customers, two choices.”

This I like: Reller debunks rumors that Surface exists solely to point PC makers in the right direction.

“We got into this business as a business,” she said. “This isn't a short-term adventure.” Nice.

Taking a long-term view

Microsoft cheerleaders have argued, in this case correctly, that looking at the first few months of Windows 8 sales isn’t necessarily any indication of how things will go long term. And certainly, as new Windows 8 devices hit the market, things could change. Reller believes they will.

“Clearly with a project this ambitious, it's not just one selling season, it will be the product of multiple selling seasons, and more progress to come,” she said.

Windows 8 will continue to evolve

Parsing Reller’s comments for any information about the many updates Microsoft plans to deliver to Windows 8 over the coming year, and possibly about the related feature pack that’s code-named Blue, she did offer up an interesting perspective. “The team is focused on really avoiding distractions and just getting set up to drive things forward,” she said, which I think says a lot about a continued strategy of ignoring feedback and, possibly, not being able to deliver big changes as quickly as hoped. (They’re just getting “set up” now to drive things forward? What were they doing before?) “It's a team that is used to delivering very, very big, complex projects together and in working across Microsoft to bring teams together … They have proven success in delivering projects together … we are moving forward and did move forward fast after the change [in leadership when Steven Sinofsky left].”

But no Blue.

“[After] a day of distraction [when Sinofsky abruptly left], people went back to the project that they're working on, which we won't talk about that today.”

Discuss this Article 22

I don't understand one thing...How is Windows 7 selling now compared to before the launch of Windows 8?
I thought Windows 7 was selling ~20 millions licenses per. month, if Windows 8 is doing the same...What are the total OS licenses being sold since Windows 8 launch?

Regarding your comment, "(They’re just getting “set up” now to drive things forward? What were they doing before?)". You do understand that there are real people behind these products, correct? With such a huge release the dev team was probably in "Ship It" mode for almost a year ... so after the RTM party they sober up and try to have a life for a little while (in addition to looking at working in other groups). I imagine things have settled down by now and they're working on the much easier point releases like Blue.

I just hope Blue unifies W8 and WP8 far more than they are now (on the C++ side).

It's not cute, it's the reality (or, at least, it was). You don't want burned out people working on major core changes this soon after release. Bug fixes, minor enhancements, etc, no problem. They can be tested properly. I can only imagine the number of "Postponed" bugs/wishlist items in Win8.

The "planning for the next version of Windows" is done at a very high level before RTM. There's a huge difference between planning and implementation.

We might be referring about two different things. When I hear "next version of Windows" I think of the core (e.g. GDI, File System) and core features (e.g. Metro). You might be referring to the bundled apps that sit on top of the core. Those come from other groups and changes there are probably more easily handled.

I agree. I'll reiterate 2 points that I have mentioned in the past. First - if this was the biggest change to Windows ever, one would think Microsoft would be working with all of its OEMs to make sure they had the right products and the right price available at launch. They didn't and Microsoft should assume most of the blame for this. Their execution was terrible. Second - I don't think Microsoft has a lot of time. I don't sense an urgency in terms of time from her remarks. I agree with Paul that if Microsoft can't deliver more timely and nimbly, they are sunk. I think they have just this year to get fixes out and products more integrated. The rest of the market is moving very fast. Microsoft has to exceed this pace to even catch up.

I'm not against the OS change at all, I bought a tablet running RT (Asus Vivo Tab RT), but shouldn't any drag on sales caused by PC makers making the "wrong" devices be more than offset by Win 8's MUCH lower price point ($40) compared to previous versions?

If Microsoft had simply let consumers and businesses toggle off the Start Screen and bring back the Start Menu, Windows 8's sales figures wouldn't have been disappointing. For only $40 I would have put Windows 8 on all our home machines, if Windows 8 came with the Start Menu. Not including the classics desktop games with Windows 8 was also a mistake. Hopefully, Microsoft will add them back in with the next version.

It seems like Microsoft tried to learn the lessons of Apple without doing the job right. Apple always seems to announce products when they are ready for release. They never wait months on end for a product to be delivered. Windows 8 was RTM'd in late October. It seems like only Surface and Lenovo's Yoga was ready as Windows 8 products. Everything else was a regular computer or laptop. We still don't know when true Windows 8 product will ship. Another failure was when we realized Windows 8 on a regular PC sucked. The Start Screen doesn't work well with a mouse. Instead of blaming the vendors, Microsoft should have anticipated the products that we have now is completely unsuitable for Windows 8 and designed a transitional OS. Of course, I realize that the Start Screen and Desktop was meant to be a transition in itself, but I hate it.

What should have been done is "profiles" that reflect the device the OS is installed on. Non-touch desktop and laptops need a Windows 7 like experience. Touch tablets and laptops need Windows 8. It is as simple as that.

I want to see a notification center in WP8 and Windows 8/RT by the end of June. Seriously. No later than fall for sure, but earlier is better and will prove that enhancements are coming agressively.

I want to see some UI issues and capabilities unified between WP8 and Win8/RT as well. In WP8 I can look at a photo, and right from there launch any installed editor to tweak it. In Win8? Nope, no can do. And there's no reason I shouldn't be able to. And XBox Video integration on WP8!

Likewise, WP8's email client is vastly superior to Win8/RT's... we need parity there and with the Web App Outlook.com.

And Win8/RT desperately needs more settings over in the Metro world (like "when does the PC go to sleep/screen dim/screen turn off" power settings, just as examples).

Search needs to be made better (more of a 'contains' search than 'starts with', with lots of added 'related keywords' so you can find things even if you don't know the exact name)... this applies to Windows Store, Bing, App Search, etc, on all platforms.

And for all systems, but especially WP8, they need to aggressively provide EASY and OBVIOUS methods for migrating from other ecosystems... importing data, contacts, music, pictures, etc., and doing it sanely. There are still too many rough edges here.

And while we're on the topic, they need to make it possible to change the email address associated with your Microsoft Account (easily), merge to Microsoft Accounts (info with an old ID merged into with a new ID, the old ID removed), and otherwise easily manage them. Right now, managing anything related to a Microsoft ID (especially the 'automaticly named' gamertag you get via XBox Games in Win8) is a pain in the ass.

They need to MOVE on some of these functionality issues/updates fast, to show people that they're not going to be orphaned, that they'll be buying into a robust system that will be aggressively updated to match the competition.

I think all of you have point. My only hope is for the Windows Team to work more closely with the Windows Phone Team. Many of the mobile functions and tasks, they [WP Team] have mastered it. Addressing the shortfalls of the touch, speech and mobile interface will regain the public interest of Windows 8. That's my two cents!

I agree with Paul and The Duke above: I would love to see them flesh out the "Surface" line with a Surface Phone, a Surface ultra-book/laptop/convertable, a Surface All-In-One desktop, and a Surface gaming system.

I need 16x10. Portrait in 16x9 (which is how I use a tablet 90% of the time) just doesn't work as well. It feels cramped, like a phone, which is not what I want a tablet to feel like.
I need higher res screens. 1920x1200 would be fine, I don't need it to go to Ipad resolutions. But it needs good color, good contrast and high res. That can be done without bringing a huge price.
I would "like" Haswell or a low power full X86 core chip. Haswell graphics will greatly help with all those pixels as well.
I really need LTE baked in. I just don't want a tablet that I need to link to my phone because I might have my tablet with me instead of my phone at any given moment. If I decide to use the tablet as a map on the road, I don't want to link it to a phone to get it to work. There is more but ultimately it's about convenience. Having LTE baked in just makes the tablet more of a universal device able to go anywhere on its own.

I've been very curious so I have to ask. Are touch screen desktops really what the public want? I can't Imagine having a 24-30 inch monitor with finger smudges all over it. A 4 inch smartphone or a 10 inch table are easy to clean by wiping are your pants or shirt. But are we really expected to keep a cleaning cloth alongside our PC now to keep the smudgies at bay? I would think a large touchpad along the lines the Apple Magic Pad would be more ideal.

The moment you try it, it's hard to give it up. Even on a desktop. Even on a big screen. Seriously. And as for a touch-pad, it's hard to target on-screen items accurately when you have to translate through a touch-pad, vs. just touching it directly on the screen.

It's one of those things that sounds worse than the reality. The reality is that it's quite addicting, and the moment you start using it, you start wishing every screen were touchable.

I have a Lenovo Yoga and find it mind-blowing. I'm loving the mix of touchpad and touch and keyboard, the ability to read on my lap like a tablet and then instantly flip the screen to type something if I need to. When I go back to a tablet or non-touch computer, I feel like I'm working with my hands tied behind my back by comparison.

My bet is that a few Win8 form factors will emerge as dominant, and then the market will take off. When people see me working with the Yoga, they're pretty surprised at how flexible and fluid it is.

So, where exactly is it written somewhere that "The pc shalt not cost fewer than 500 dollars"? Why are low cost pcs such a problem? That is the biggest advantage that Windows has over Mac! Plus, there are people that cannot afford our new more expensive line of pcs, but they won't simply stop computing, they will pick up a chromebook for only $200 (You know, how much the Surface should have been?)

What did Microsoft honestly think was going to happen? They totally destroy the traditional desktop and replace it with a UI that is not even meant to be on a non touch machine... Having used Windows 8 since the Consumer Preview = I bought my laptop with Windows 7 Professional.....No way you are going to get me to use that tragedty called Windows 8...

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